The Chernobyl Effect

How a Nuclear accident in the Ukraine launched Washington wine in Europe.

Economics has been called the science of unintended consequences because economists are good at tracking down the complex indirect effects of seemingly simple policies and events. The study of global wine markets always makes me appreciate the power of unexpected connections.

The Washington and Oregon wine industries are making a major push right now to get attention (and distribution) in Great Britain and other export markets. I hope that these programs have their intended effect, but one the first significant Washington exports to Europe was not planned; it was the unexpected consequence of a freak accident. Here is a story that I have pieced together from various sources about how Washington wine made one of its first important impacts on foreign markets.

It started with an accident that occurred on April 26, 1986 in a town called Pripyat in the Ukraine. Pripyat was home to the Chernobyl nuclear reactor, which experienced a catastrophic failure on that April day, resulting in panic and loss of life. Pripyat was evacuated and remains a ghost town to this day. But the effects extended well beyond the reactor site. Plumes of radioactive fallout rose high into the atmosphere and were taken by the prevailing winds north and west as the map above shows (click on the map to enlarge it).

The northern radiation plume caused panic and alarm in Scandinavia, as you might expect. The uncertain long-term consequences of an unavoidable invisible threat continues to haunt residents of this region. At the time, of course, the priority was to avoid radioactive contamination: stay inside, don’t eat food that was grown in the fallout zone, don’t drink milk from cows that grazed on fallout-dusted fields, and so on. The health concern naturally extended to wine.

Systembolaget, the Swedish national retail alcohol monopoly, faced a dilemma. Much of the red wine it sold came from regions of France that were squarely in the path of the western fallout plume (although not, as the map indicates, among the most severely affected regions). There was no way that it could sell this French wine to anxious Swedish customers.

So the word went out through wine networks: Systembolaget was looking for sources of uncontaminated Bordeaux-style red wines to fill their shelves until the French wine scare was over. And so Tom Hedges received a call. Tom (a 1973 graduate of the University of Puget Sound) was hard at work trying to sell Washington wines in Taiwan — a difficult task in the 1980s as you may imagine. Tom saw an opportunity to act as a middleman between the Washington winemakers he knew who had Cabernet and Merlot to sell and the Swedish wine retailer. He became a négociantas such middlemen are called in the wine business. He bought up surplus wine from various Washington sources, blended and bottled it (under the Hedges Cellars label) and shipped it off to Sweden, where it found customers who might not otherwise have been willing or able to try a Washington wine.

The wines were good enough that Systembolaget came back from more. In fact, they wanted to visit Tom’s Chateau and Estate, to see how good wine was produced in what was to them an unlikely part of the world. This was a problem, of course, since Hedges Cellars was what we would call today a “virtual” winery. And so he responded by planting a vineyard (one of the first on Red Mountain, which is today one of Washington’s premier AVAs) and building a winery (which is now Hedges Family Estate).

Thus did a nuclear accident in the Ukraine help bring Washington wines to the international market.

The Wine Economist

What would you get if you crossed the Wine Spectator, America's best-selling wine magazine, with the Economist, the world's leading business weekly? The answer is this blog, The Wine Economist, which analyzes and interprets today's global wine markets. The Wine Economist was named 2015 "Best in the World" wine blog by Gourmand International. Staff: Mike Veseth (editor-in-chief) & Sue Veseth (contributing editor).